Examining Assignments For The Benefit Of Creditors

Law360, New York (May 1, 2013, 4:01 PM EDT) -- An assignment for the benefit of creditors (also known as a “general assignment” or “ABC”) involves the assignment of all of a company’s assets to a third-party assignee. The assignee, who holds legal and equitable title to the company’s assets in trust by virtue of the assignment, will then conduct a sale of such assets, the proceeds of which will be distributed to the company’s creditors pursuant to priorities established by reference to applicable state law.